New research from ISA estimates 480,000 Australians across all age groups have wiped out their super before the second tranche of the early release scheme opens, with many of them under 35.
“Those early contributions are like yeast, without them you’re left with a much flatter nest egg,” said ISA CEO Bernie Dean. “To have hundreds of thousands wiping their savings out mid-way through their life is a tragedy waiting to happen and it will affect everyone. Every Australian deserves a good life in retirement, not just scraping by on the pension.”
ISA commissioned the research in response to a “noisy group of backbench MPs” who want to dump the legislated increase to the super guarantee, warning it would leave a generation of workers more reliant on the aged pension and lead to a higher tax bill.
“The Prime Minister and Treasurer must stick by their promise to increase the super rate because [it’s] critical to helping these people rebuild savings they’ve wiped out, and avoid tax hikes on working people to prop up more people drawing a full pension,” Mr Dean said.
ISA also warned of “troubling reports” of super being used for gambling and discretionary spending and that the early release scheme was likely to surpass the government’s forecast of $27 billion, with $15 billion already gone before the second tranche opens.
Earlier this week, ISA chair Greg Combet warned the consequences of freezing the super guarantee would be “significant”.
“There shouldn’t be any further delays to the super guarantee rises,” Mr Combet said. “They’ve been delayed for years. They’ve been promised repeatedly. They’ve been legislated by the Parliament, and they are law… The argument that it will cost people a wage rise is a complete furphy. Freezing the super guarantee will only cost people the super guarantee.”
